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PRECIOUS METALS: Gold futures gains on weak dollar, oil advances

Silver down 9.1 percent this year
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27 August 2008 @ 04:35 pm ET
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NEW YORK - Gold futures gained for a second session Wednesday as the U.S. dollar fell against the euro, boosting dollar-denominated gold prices, while higher crude prices also increased the metal's investment appeal.

Gold for December delivery rose $5.9, or 0.7 percent, to close at $834 an ounce on the Comex division on the New York Mercantile Exchange. The metal hit a high of s $841.4 in electronic trading, the highest since Aug. 21. The metal rose 0.3 percent yesterday.

"Gold is showing strength again with the dollar giving up yesterday's gains and oil firming again on hurricane fears," said Mark O'Byrne, executive director at Gold and Silver Investment.

The dollar weakened against the euro for the first time in four sessions. The dollar dropped after the Commerce Department reported orders for U.S.-made durable goods surged in July, gaining 1.3 percent on strong demand for transportation equipment.

The dollar index, which tracks the value of the greenback against other major currencies, dropped 0.1 percent. The index was 0.7 percent lower before the durable-goods data.

Crude-oil prices extended this week's rally, up 1.1 percent at $117.51 a barrel in New York, on concern storms may disrupt U.S. petroleum production in the Gulf of Mexico, where about a quarter of U.S. domestic oil is produced.

Silver futures for December delivery fell 11 cents, or 0.8 percent, to $13.568 an ounce on the Comex. The metal has fallen 9.1 percent this year, while gold dropped 0.5 percent.

Also on the Nymex, October platinum gained 1.4 percent to $1,440.70 an ounce. December palladium rose 0.4 percent to $289.60 an ounce. September copper added 0.9 percent to end at $3.47 a pound.

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